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HMRC internal manual

Compliance Handbook

The Human Rights Act and Penalties: behaviours and penalty ranges

The penalties introduced in recent Finance acts for example by FA2007 (Penalties for Inaccuracies) are designed to address behaviour.

The more serious the behaviour, the higher the maximum penalty rate will be.

For example,

  • a deliberate and concealed wrongdoing has a maximum penalty rate of 100%
  • a deliberate inaccuracy involving offshore matters in certain categories has a maximum penalty rate of 200%

We accept that penalties that arise from deliberate, and deliberate and concealed, behaviour are ‘criminal’ within Article 6 of the ECHR because of

  • the nature of the offence
  • the seriousness of the behaviour, and
  • the higher level of maximum penalty.

We do not accept that penalties that arise from other behaviours are within Article 6. This is because we do not consider that careless, or non-deliberate, behaviour can be deemed to be ‘criminal’.

However, in practice you must treat all behaviour-based tax penalties as if they are within Article 6, CH300200 explains why.